Question 4: (25 marks)

1. Define market capitalization and its impact on organizations; list its formula and explain each component? (7.5 marks)
2. A company's most important goal is to make money and keep it, which depends on liquidity and efficiency. Because these characteristics determine a company's ability to pay investors a dividend, profitability is reflected in share price. Therefore investors should know how to analyze various facets of profitability; including how efficiently a company uses its resources and how much income it generates from operations. Define how to calculate and analyze a corporate profit margin and reflect on the impact of COVID-19 on 2020s corporations profit margins. (12.5 marks)
3. Define the Time Value of Money and its relation to the present value of cash flows.

(5 marks)